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Monitoring and Pay: An Experiment on Employee Performance under Endogenous Supervision Author info | Abstract | Publisher info | Download info | Related research | Statistics Dennis Dittrich () (University of Erfurt)
Martin G. Kocher () (Universiteit van Amsterdam)
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We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under selfishness assumptions. Yet, we also find evidence for reciprocal behavior. The data analysis shows, however, that it does not pay for the employer to rely on the reciprocity of employees.
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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number
06-098/1.
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Date of creation: 01 Nov 2006Date of revision:
Handle: RePEc:dgr:uvatin:20060098Contact details of provider: Web page: http://www.tinbergen.nl/
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Keywords: incentive contracts supervision efficiency wages experiment incomplete contracts reciprocity Other versions of this item:
Find related papers by JEL classification: C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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